Apple Inc. is in advanced talks with News Corp. to let iTunes
users rent TV shows for 99 cents and is in discussions with other
media companies about similar deals, said three people familiar
with the plan.

Viewers would be able to rent programs from News Corp.’s Fox for
48 hours, said the people, who declined to be identified because
the discussions aren’t public. CBS Corp. and Walt Disney Co. —
where Apple Chief Executive Officer Steve Jobs is a board member
and the largest shareholder — also are in talks about joining the
effort, the people say.

The content deals would give Apple users access to some of the
most-watched shows on TV and increase the appeal of its devices,
including the iPad, iPhone and iPod Touch.

Adding programming also would build on iTunes’ role as the
biggest retailer of music and mobile applications, and help Apple
ward off companies like Netflix Inc. and Amazon.com Inc., which
offer their own online video services.

“This is a smart move by everyone,” said David Bank, an analyst
at RBC Capital Markets in New York. “Something like this a la carte
rental service is an incremental opportunity.”

The episodes will be available to Apple’s rental service within
24 hours of their air dates and will be commercial-free, one of the
people said. Apple plans to hold a San Francisco event Sept. 7 to
unveil the service and a refreshed line of entertainment products,
two people said.

Apple also plans to introduce a new version of the Touch with a
higher-resolution screen — similar to the display featured on the
iPhone 4 — and a $99 version of its three-year- old Apple TV
set-top box, one person said.

The a la carte rental plan follows an abandoned effort to create
a subscription television service, said two of the people.

A subscription service with Apple would have jeopardized the TV
networks’ chances of getting higher retransmission fees from
TV-system operators, RBC Capital’s Bank said. The four big
broadcast networks — Fox, NBC, CBS and ABC — receive about $250
million a year in so-called retransmission fees industrywide, he
said. That number will balloon to several billion dollars within
five years, Bank said.

“If you’re running a TV network, you don’t want to upset the
existing ecosystem broadly by starting a rival subscription service
with Apple,” he said. “You want to look for ways to drive
incremental revenue.”